Koch Industries to Buy Molex

Molex Incorporated (NASDAQ: MOLX, MOLXA announced that it has entered into a definitive agreement to be acquired by Koch Industries, Inc. Under the terms of the agreement, Koch Industries will acquire all of Molex’s outstanding shares, including the Common Stock (MOLX), the Class A Common Stock (MOLXA) and the Class B Common Stock, for $38.50 per share in cash, for a total equity value of approximately $7.2 billion. Based on the closing stock prices on September 6, 2013, the purchase price represents a 42% premium to the equity value of Molex’s publicly-traded stock, specifically a 31% premium to the Common Stock and a 56% premium to the Class A Common Stock.

The agreement has been approved by both the Molex and the Koch Industries boards of directors. Certain members of the Krehbiel Family and certain executive officers of Molex, owning in the aggregate voting stock representing approximately 32% of the Common Stock and 94% of the Class B Common Stock, have entered into voting agreements with Koch by which they have agreed to vote their stock in support of the transaction.

At the close of the transaction, Molex will become a standalone subsidiary of Koch Industries and will continue to be operated by the company’s current management team. Molex, with a 75-year history of industry-leading product innovation, will retain the company name following the transaction as well as its headquarters in Lisle, Illinois.

“After 75 years this was a difficult decision, but our board of directors and our family believe that this transaction, which follows a diligent and thorough review process by the board, provides outstanding benefits for all our stakeholders. Importantly, our shareholders will receive a significant premium and compelling value for their holdings. The transaction is expected to provide substantial opportunities for our worldwide employees, many of whom have spent much of their working lives at Molex and are responsible for the company’s long term success,” said Fred Krehbiel, co-chairman of the Molex board.

“For our customers and employees, this transaction will allow us to build on Molex’s proud past and strengthen us for a powerful future. We are excited to work with Koch to continue our track record of growth and investment in people, innovation and technology,” said Martin Slark, vice chairman and chief executive officer of Molex.

Charles Koch, chairman and chief executive officer of Koch Industries, considers Molex “an exciting acquisition that matches up well with our culture and our core capabilities. It also provides a significant new platform for growth.

“Molex has become a global leader by focusing on product innovation and value creation, driven by its talented leadership and employees,” Koch said. “We look forward to jointly applying the capabilities of our two companies to help take both to the next level.”

The transaction is not subject to a financing condition, and the parties are targeting a calendar year-end close, subject to customary closing conditions, including receipt of shareholder and regulatory approvals.

William Blair & Company and BDT & Company are serving as lead financial advisors to Molex in connection with this transaction, and Goldman, Sachs & Co. provided a fairness opinion and other financial advice. Dentons is acting as Molex’s legal advisor. Koch is represented by Latham & Watkins LLP in connection with the transaction.

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